Summary
– Motor vehicle manufacturing industry in South Africa contributes 4.3% to GDP in 2023
– Record exports of 399,594 vehicles in 2023
– Slow adoption of battery-electric vehicles in South Africa due to limited variety and high import taxes
– Market shares of plug-in hybrid, BEV, and plug-less hybrids in South African new vehicle sales market
– Sales of plug-in hybrids and BEVs improving in Q1 2024 compared to Q1 2023
Article
The motor vehicle manufacturing industry in South Africa is a key sector, contributing 4.3% to the gross domestic product. With 633,332 vehicles produced and 399,594 vehicles exported in 2023, it was a record year for exports. However, domestic vehicle sales only increased by 0.5% year-on-year. Despite this growth, the vast majority of vehicles sold in South Africa are internal combustion engine vehicles, with only a small percentage being battery-electric vehicles. The slow growth in electric vehicle sales is attributed to limited variety, high import duties, and taxes imposed on EVs, making them significantly more expensive compared to traditional vehicles.
South Africans are starting to show interest in vehicles with traction battery packs and electric motors, with plug-less hybrids gaining some traction in the market. However, plug-in hybrids, battery-electric vehicles, and plug-less hybrids still only make up a combined market share of 1.5% of new vehicle sales in South Africa. Sales of plug-in hybrids and BEVs are showing signs of recovery, with an increase in sales in Q1 2024 compared to the previous year. It is hoped that as more affordable EV options enter the market, sales will continue to grow in the coming quarters.
With the overwhelming majority of vehicles in South Africa being ICE vehicles, efforts must be made to promote the adoption of electric vehicles in the country. This includes not only increasing the availability of EV models but also addressing the high taxes and import duties that make them more expensive. With many countries around the world promoting EV adoption, it would be beneficial for South Africa to increase the share of locally assembled plug-in vehicles both for domestic sales and for export to EV-friendly markets.
In order to accelerate the adoption of electric vehicles in South Africa, more work needs to be done to overcome the barriers that are currently hindering their growth. This includes addressing high taxes and import duties on EVs, expanding the variety of available models, and promoting the benefits of electric vehicles to consumers. As sales of plug-in hybrids and BEVs show signs of improvement, it is essential to continue this momentum and drive towards a more sustainable and eco-friendly automotive industry in South Africa.
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